to talk about candidates of pakistan's many elections a roadside bomb hit an election convoy killing four but leaving the politician unscathed. a magnitude seven point eight earthquake centered in iran has reportedly left thirty four people dead across the border in pakistan and iran state television says only one person died that tremors were felt across the gulf from dubai buildings were evacuated all the way to new delhi but people ran into the streets and said it was as powerful as the one in pakistan controlled kashmir which left seventy five thousand dead in two thousand and five and we could go another quake in western iran killed dozens. well just let you know r.t. is having a technical break from midnight moscow time that's about half an hour from now but we'll be back bright and early tomorrow morning but first though a man loved by the people but feared by the banks skies there and because reporting just a couple of minutes. oh

no who lazy bureaucratic and trivial censorship strikes again but this time in russia a bill has been signed into law that will put fines on individuals and legal and to these for using vulgar already in the media one major flaw of many with this is that they really don't know which words are going to be considered vogue or i guess these words are so awful that they cannot even write them down i'm not naïve there has always been and will always be censorship but this where word list is just silly there is a common expression on the russian internet that russian mainstream media could exploit more and i was ation of society russian t.v. does have all the bloody violent action movies as well as scandalous talk shows which are kind of more like freak shows. and plenty of reality t.v.

where young people pretty much act like subhuman animals in a cage they've got all that so the government is basically saying that if some guy on t.v. because there are twenty people blooded limbs flying that that is totally ok for television unless they come out for bid swear while doing it you can show brainless materialistic dimwits sweeping and fighting with everything that moves on a reality show but if they see that one magic three letter russian word then it is over the line this is not a logical way to conduct censorship but that's just my opinion. download. cation so choose your life stream quality and enjoy your favorite. if you're away from your television just doesn't matter with

your mobile device you can watch on t.v. anytime anywhere. i am x. cash or welcome to the kaiser report many people want to know what is going on mt gox the bitcoin exchange. market making we're going to talk about that right now stacy herbert max keiser for those out there who don't know of course the big question is this new currency is network protocol. an online exchange and way to transfer value online and eighty percent of big coins are traded on mt gox now mt gox stands for magic the gathering online exchange. it started life as

a place where you could exchange magic the gathering cards for cash and it ended up not by design obviously but it became the place to go to trade bitcoins as well but william bonzai has created a backstage look at what the mt gox commando looks like as you see it looks very nine hundred fifty s. now max you created the hollywood stock exchange where it's run by the virtual specialist technology which you invented and a few days before mt gox crashed. you warned exactly on this so explain what is wrong with the market making function here the way trades are processed the buyers and the sellers at mt gox and all these other exchanges it's not done in a way that's commensurate let's say with the way trades are cleared and exchange the new york stock exchange or some other exchange where there is

a specialist function who is making a market and their job is to create a fair and orderly price matching buys and sells and so they do this by by having both the ability to match trades buyers and sellers but also managing an inventory of whatever it is they're trading in so if it's i.b.m. stock on the floor of the new york stock exchange the market maker would have an inventory of i.b.m. stock so that if in fact there was a mismatch of buyers and sellers they can step in and be the market be the market maker that doesn't exist on any of these exchanges really they're trying to match up buyers and sellers in a way that's completely inappropriate for any kind of modern market making mechanism and so while i'm in the process now of trying to straighten that out by working about consulting with projects here in london and elsewhere to see if we can bring in a world class market making and of course my patent on this the virtual specialist the designs of that patent which were go back to the one nine hundred ninety s.

there's been a lot of improved ideas that have come along sense then that i'm hoping to bring to the to the party what would mt gox look like with a proper market making function if it were actually matching buyers and sellers right now their hands off it just comes as the orders come in it clears those orders even if it's point there is there is there one bitcoin it goes into the same queue as somebody trying to place an order for a thousand bitcoins so first of all there's really only one security here and that's but going but there's multiple exchanges trying to. the exchanges buyers and sellers of big going tonight have different price discovery spread out over different exchanges and they're all inadequate so you have this incredible spread on different prices on different exchanges so that's problem number one the good news is that there's only one security or they need to make a marketing but there needs to be one at least one functioning market that's able to take buys and sells and create that what it would look like mt gox you'd be able

to for example put in market orders for bitcoin at a fair and orderly price that would be at or near what is the market for for bitcoin right now you have a lot of people putting in a limit orders they want to buy sell at a certain price and these are lined up and they're trying to match these limit orders against each other there is no real good way to buy and sell at the market or market orders and if you don't have a market of water and this was the innovation i brought to the virtual specialist technology back in the one nine hundred ninety s. it's how to create a market order on an exchange of the virtual security using a virtual currency which was the basis then for hollywood stock exchange it was a basis for what became known as the prediction market industry which pretty much is built on my technologies built on my concepts of what you can do with a virtual currency in a virtual market and so indeed to bring some of that over to this space to make a market but as you point out as i've said all along the mining a bit coins under nakamoto that's the genesis creation of the bitcoins that's brilliant and it's fantastic and at the block chain itself of bitcoin creation is

unimpeachable and there's nothing wrong with that then there's the wallet technology which is to some degree being proven to be a little bit less than robust then there's the merchant side of the business that seems to be doing the best you know people who are actually in the business of facilitating merchandising are doing quite well but then the exchange piece of the coin ecosystem as i've been saying now all along is the weakest link in the chain because you have people who are trying to adapt magic card trading systems for multibillion dollar exchange. platforms and they're not up to the task however the success of bitcoin itself as mt gox says that they were signing up eighty thousand new registrants in march or sixty thousand sorry and now they're doing twenty thousand new registrants a day so this is a booming market but see n.b.c. after this crash did contact you and it resulted in the headline big coin crash

spurs race to create new exchanges so there's a lot of former guys like you who were. still a guy but guys who were formerly market makers or creators and exchanges so whether it's the rumor is cantor fitzgerald is coming up with an exchange this is a rumor we have heard that exclusive here that they're going to introduce your technology to the big queen space there's a new site called open queen which is trading bitcoin but also ripple another mass backed currency and we talked about that here two years ago with david hales but the guy behind that is the guy behind the p.d.p. lending facility i think prosper so there are guys who have built big companies making markets and prices and price discovery who know what they're doing rather than this like gaming center here i think for people to understand where we are on

the chronological progression the timeline of bitcoins acceptance and use as mainstream currency and challenge to currencies you have to understand that right now the technology of bitcoin is what i would say pre netscape if you remember netscape went public in the early one nine hundred ninety s. and before then there was no browser really that people were using on the internet there was no way to just jump onto a browser and start surfing the web it was done in a way that was extremely user unfriendly then you had a net. scaping netscape went public and then you had google and you had e-bay and you had this whole phenomenon known as the internet but is based on that browser technology right now there is no similar ease of use technology then people will be buying and selling bitcoins and will not and any moment ever think about the block chain or so toshi or cryptology they'll never crossed our mind they're just be

buying and selling but going but so this is the mad dash for to be taking advantage of what is going to be a multi hundred billion multi-trillion dollar market so the internet before netscape was when paul krugman said the internet is just a fad it will never be bigger and more important to the economy and the fax machine and looking at it then that the ugly beast it was that only richard stallman could figure out how to use it by the way when we've seen richard stallman use the internet he doesn't use it like you do but paul krugman has also weighed in on big korean with similar opinion right well you'd expect that because these guys are their indicators of of a market in a way that you have to interpret their words as a good reason to do the exact opposite so he's a guy who is he's just he's on the payroll of the of an academic system and the new york times to produce columns that old blue haired ladies

a sense of comfort on their park avenue apartments that has no relevancy to actual day to day workings of technology the economy currencies is a complete bimbo in the second half we do talk to tony clippy of bit pay who was here last wednesday he was in town from atlanta and so we did talk to him before the mt gox crash but you know on the merchant side he's signing up merchants right left and center for a merchant which i've been on pirate my film and i've also used pay pal the. ease of use is just dramatically different for merchants anybody selling something it's much easier and there are those out there who are saying well you know what can you do you know you can't buy anything but i'm ozzy metals who we were you know when we were with tony gloopy that night when mt gox was crashing he was saying that the metals where you could use your bitcoin to buy gold and silver they had their

record volume that day people were trading their bitcoin for gold and silver immediate cash for cash won't but it is an example of a service as ease of use and people are sticking that you know used to it going to get paid to merchandise for the merchants to use and they are able to do it on my side pirate my film dot com we've been we've we've financed twenty films using big coin and pay so that's the only crowdfunding site out there that uses bitcoin pay is processing five million dollars a month but again it's still in the infancy this whole new network protocol this new virtual currency in peer to peer currency and you know i want to compare it to a story that was going on at the same exact time the same day as mt gox i n g again targeted in d.d. o. s. attack i n g bank customers were again unable to use online banking services on tuesday night because of a renewed cyber attack this was a week after they were left in chaos for a whole week because they were being attacked but here's one bank in the

netherlands the euro didn't crash the economy didn't crash because of course there are other banks and other ways of getting cash the banks are suffering exactly the same problems as a big point of suffering the economies are suffering from the exact problems and the dollar and the yen of the euro are being debased or fooled around with or confiscated by various governments so i think the big point is a good proxy to understand how chaotic the global finance is just because paul krugman comes out of the coma says that there's nothing to worry about because the . us dollar is manipulated managed by the central banking system even though that causing massive austerity and poverty around the world doesn't mean that these currencies are not in a state of crises bitcoin is the proxy for how screwed up these other currencies are you want to know get a true price signal of how screwed up the global economy is don't look at the dollar don't look at the dow jones look at bitcoin this is this is what is telling

you how screwed up the rest of the world economy is and again you know it is a network protocol and as adoption of the technology spreads you were talking about your days being an internet space in one nine hundred ninety four is a lot different from what it is now it was a lot more expensive and time consuming then but now it's much easier i want to look at this chart consumption spreads faster today and this is from the new york times and as you see you know the telephone took from one thousand nine hundred all the way to nine hundred seventy five before it hit ninety percent of the population clothes dryer all the way over there on the left from one thousand twenty it took up to two thousand to get to eighty percent the automobile stove all started there on the left the old technologies but took a long time to get one hundred percent and then as you see on the right you know the the we've gets closer and closer jampacked closer and closer is the internet telephone fax v.c.r. looks like a bubble it goes back to my idea that i came up with twenty five years ago about the lunar dollar which would be

a currency traded on the dark side of the moon that would be based in units of time and would allow you to buy and sell your way through time backwards and forwards i mean that's what i thought you could come up with i think big days an interesting staging platform to be come into the little dollar protocol which i'm working on now in my imagination you do you know there is an iranian scientist who says he's invented something that could take you eight years in the future perhaps you and i don't get a credit i never get credit for these things people just rip me off you know it's terrible i just give me credit if you get me off give me credit all right stay here we're thank so much for being on the kaiser report thank you matt. so if you're with us i can have a big talk about telling the lobby bit pay dot com. sic

to multiply here each day. it's very profitable to invest in colombia we did a very profitable is a very high return on investment. but i've been working in this area for thirty years and i've always had to pay the armed groups that they needed betis the managers or change their name and strategy but just tell the same budrus. high ranking suspects you know coming. pretty upset about that mr president. the president. both the media. i won't give an interview i'm sorry but no.

investigation is it. says sick stop your bullshit and keep quiet or else you'll suffer the consequences. even if they're your bodyguards to watch themselves because the same goes for the. river from since i've never heard of such a case as ours are so much money in gold still so many. for all the gold in colombia. speak to language. programs in documentaries in arabic in school here on. the team from the world talks about six of p.r.p. interviews to treat stories for you. in troy arabic. visit arabic.

international and in the very heart of moscow. welcome back to the kaiser report i'm max kaiser time now to turn to tony libby bit today tony welcome to the kaiser report thanks max nice to see you again haven't seen you since prague i know and that was the beginning of the big pay big korean

kind of phenomenon a few years ago when i was just really a crypto punk currency but now it's mainstream is it's definitely come a long way now here in the biz a big pay so this is part of the business that's in the transactions side of the business the bit coin ecosystem has a number of different you know moving parts here in the transaction business i guess you could one could say are similar to pay pal in that sense correct somewhat the merchant side of pay pal you know we don't offer any consumer services but what we do is we make it easy for businesses to accept bitcoin as a form of payment i would imagine there's a lot of demand for it there is you know there is a lot of pain out there today and businesses trying to collect. especially if you're trying to collect a payment over the internet and you're trying to sell a high ticket item you know it's very risky today what bitcoin allows a business to do is accept a payment over the internet from any country on the planet with nearly no risk of fraud and no other payment processor and payment network can do that today so the value proposition is there but it works completely differently than paper and

credit cards and everything else so none of the existing software the businesses have will process so that's why we got to work about two years ago in creating a new platform a new interface that would allow businesses to accept that coin as a form of payment ok so if somebody says big coin is a bank currency is that true. oh well it's you you are storing your money in the cloud because it is money in the cloud and like everything else that's moving to the cloud you can access it from any computer anywhere in the world at any time and you can do whatever the heck you want with it you know because it is the only kind of money that you can do that with ok so the answer though is that it is without banks well you're going to go you don't need a bank you're trusting your peers you're trusting the millions of people who are already missing it was also that reason is a bit of a controversy because people think that they need banks they think they need currency backed by banks in a central bank with the name of a country on it and this is a challenge and they say well it's like p.d.p. torrence the challenge the music industry this is really challenging the whole banking infrastructure but i want to go back to kind of

a philosophical question you know we've had chats before in the past to kind of the bigger philosophy of big coin but i think people as particularly writers like felix salmon of reuters and others they look at it they're trying to evaluate it as a commodity or they're trying to look at it in terms of just a currency and they're trying to apply economic arguments to it but i think everyone misses the point that the first the place you start with when you talk about bitcoin is that something called a bit coin protocol which is a network protocol yes and that's something everyone seems to be missing talk about it sure so the value of the network is that individual nodes can transact with each other without going through a central bank or a central clearing that is the fundamental computer science innovation behind bitcoin ok so for example in that you've got h.t.t.p. you've got ip you've got ether net these are all network protocols for it so nakamoto pseudonymous founder could be one guy could be

a group of guys they took that concept of the network protocol and they plotted to currency to money you know and it really it's not a true currency it's not a true commodity it's almost a new asset class right it is not defined by what we know i think that's an important point because i know here in london we're building now on. having been sconce alterations with funds that look are looking at it as an asset class that they need exposure to because the economy is fundamentally changing in a big way so let's talk about the recent comments from finns and when this is a regulatory body in the us they have a ruling. which i guess the broad description of this ruling would be that big coin would fall under roughly jurisdictional concerns relating to money laundering etc it's only when the feds are involved that is good or bad when you think well it's good first of all it's just guidance it's not

a ruling but it basically says that coins are money which is something that we've been proposing for several years now and which is good so at least they have come along to agree with their argument but you know what it says is that if you have a certain type of activity like if you do remittance or payroll or some type of a money transfer activity money transmission activity the same rule should apply whether you use dollars or bitcoin or anything else right so the rules should be applied to big big point is now considered money but clearly it's starting to get on the radar but it also shows that they don't quite understand it you know big or in the cloud it's an accounting ledger in the cloud and you're not actually transporting anything even if i were to send ubiquitous right now i'm not sending you any type of a file or an attachment i'm moving money from my account in the cloud to your account in the cloud and that accounting ledger is stored on you know tens of thousands of computers around the world how many companies are in the periphery of this two point five billion dollars bitcoin valuation you're in a company or in a startup you're in bit pay your debt lana ga you're hiring people you're part of

the new economy how many other startups are out there approximately there's dozens and they're doing wallets they're doing exchanges they're doing merchant services they're they're creating stores where people can spend their bitcoins right because now you have people who are early investors that are now but millionaires they really want to sell them because they want to start by. and properties and cars and other items you know for their lifestyle they want to just trade their big corns for those items deployed is that they're not hoarding bitcoin so much as they looking for something to buy with it going to show me something i want yeah and they'll spend it show me a car show me they have savings you know they have independence they're economically free absolute they're rich and they can go anywhere in the world and access their money anytime and do whatever the heck they want with it what about now there seems to be you know economically speaking at first of course the keynesians out there don't like it because they have they're into money printing and central planning so ok forget them then i meant to it then you've got the i would say the libertarians and the so-called austrian school you know they're more

about honest money or true money or gold and silver is money but within the austrian school there seems to be a split and you've got some within the school that are you know a bit bitcoin fulfills karl mangas definition of money and therefore it's austria and it's good and then there are some people that are saying no it's not ok so you're smiling so you're aware of this argument not to get too philosophical here but throw some come of this brewing controversy if you can well i think maybe let's just take a simple example of somebody who's into gold they see gold as a safe haven it is the only true hard currency of the world has been for thousands of years. that's very true gold is a last resort where all else will will follow down to in the pyramid but right now you know it's not very easy to transport gold did you see the guy who had a million dollars worth of the earth but millions of dollars worth of his car and got busted at the border and that he is in chicago if he had used bitcoin he would have had we understand that you know it has a portability yes it's good but on the an ok portability fungibility

a durable a that's all good words where there seems to be a question is intrinsic value people say gold has intrinsic value i can make jewelry out of it i can see it because it has no intrinsic value i think that does but year the master of the bitcoin world tell us well i think you have to look. what gives any type of money value you know we started with gold then we went to paper money paper money was more convenient to carry around and more convenient to make change that is backed by gold backed by gold and then we went to digital money like digital dollars right centrally issued digital currencies that are linked to gold and linked to paper dollars at least initially until we went off the gold standard so everything was kind of linked to something else right now our money is linked to debt. bitcoin is now just pure information and so it what gives any type of money value is how useful is it as money you know a gold coin is worth so much but if you've got to pay somebody in germany right now that gold coin is not going to do you a lot of good in that case you know money in a bank account might be useful to you know what is any type of money value including because it is its utility as money what can you do with it and now that

you have a global network an accounting ledger in the cloud and peers to peer peer to peer you know that's what gives because it's value it's the network and it's what you can do with ok it's useful but getting back to the intrinsic value discussion argument a little bit more the. there is an intrinsic value to bitcoin that has to do with its value as crypt a logical expression of cryptology that in other words the mining process which is at the heart of creating these coins you're mining the code face of the cyber digital world you know so to speak where you're extracting these extraordinarily large prime numbers using the network harnessed the network in a way that's the biggest distributed in computer project in the history of the world and you're extract in these huge prime numbers the way you do extract the gold nugget and then that's distributed to the network which is then the economy so that's that has intrinsic value these numbers have intrinsic value yes you know and

one of the things that any payment network has to have as a data center right visa has one american express as one but with a completely distributed peer to peer currency where do you put the data center and that's where the mining comes into play right any individual can contribute their computing power to being part of the data center and there they are we. warded with the newly issued bitcoins and it's a lottery system so the more people that are doing it right the less likely that you are to win and people pull together so if you use a proof of work algorithm and there's one common thing that if the majority of the network agrees on one version of history then that's the one that everybody builds upon and follows so in order to potentially attack the network and you know you have one version of history and you convince everybody else to have a different version of history you basically have to take control of a majority of the network for a sustained period of time. today as the network gets larger and larger that becomes almost impossible you're not going to get fifty to sixty percent of the network for a sustained period of time today without investing you know billions of dollars and not only just throwing money at the problem but you have to actually get your.